Johnson Holds Life-or-Death Budget Negotiations

Speaker of the House Mike Johnson met with competing groups of Republican lawmakers Thursday morning on issues that could decide whether or not the GOP’s “big, beautiful” budget bill passes the House.

Johnson, R-La., is working at a feverish pace to pass a budget reconciliation bill that would fulfill President Donald Trump’s campaign promises, such as extending his first-term 2017 tax cuts and funding border security.

But there are two issues in the House that could sink the entire thing. 

On one hand, fiscal hawks in the House Freedom Caucus are saying that the proposed reforms to Medicaid—some of which wouldn’t kick in until 2029—are not nearly aggressive enough.

On the other hand, a group of four New York Republicans are saying that they need a higher cap on state and local tax (SALT) deductions or they won’t back the bill. These four representatives could kill the bill together if they all vote against it, given the GOP’s razor-thin majority in the House.

Emerging from a meeting with members of both camps, Johnson said they were working on reconciling their differences.

“It was a very thoughtful discussion,” the Louisiana lawmaker said.

“I think everyone will say it was productive, and that we were moving the ball forward. Everyone has known that the SALT issue is one of the big ones that we have to resolve.”

He added, “Not everybody is going to be delighted with every provision in a bill this large, but everyone can be satisfied. And we’re very, very close to that … . We are still on path to pass this bill next week.” 

But the balancing act of appeasing SALT advocates is tricky, as it would likely lower revenues at a moment when fiscal hawks in the Freedom Caucus are already dissatisfied with the bill’s cost savings.

“If you do more on SALT, you have to find more on savings,” Johnson acknowledged when pressed on the matter. 

“We’re trying to do this in a deficit-neutral way. That was the commitment we made all along … . Find at least $1.5 trillion in savings, and then you can spend, effectively, by extending the tax cuts, $4 trillion.”

On his way out, The Daily Signal asked Johnson if he would consider more aggressive Medicaid reforms as a cost-saver. 

“Everything’s on the table,” he said, nodding.

Rep. Byron Donalds, R-Fla., came out of the meeting optimistic about negotiations, but argued that Republicans should pursue more aggressive Medicaid reforms.

“One of the adjustments that could occur is putting some states that have not expanded Medicaid on the trajectory to expanding Medicaid. Florida is not expanding Medicaid. As long as I’m governor, that’s not going to happen.”

Donalds is running with Trump’s endorsement in the 2026 Florida Republican gubernatorial election.

Asked if he’d be in favor of raising the offer of an increased SALT cap above the speaker’s initial $30,000 concession to the New York Republicans, he replied, “I think $30,000 is more than generous.”

Asked by The Daily Signal whether Republicans were delaying implementing Medicaid work requirements out of political pressure, he replied sardonically, “It’s politics, man. The currency of the realm is fear.”

He added, “I think they [work requirements] should be moved up. That’s my view, I think they should be moved up.”

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